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The gigantic fund complex just sent the SEC a comment letter arguing that "additional regulation of money market funds is neither necessary nor desirable."

Schapiro has made her ambitions plain: MMFs need to either give up the fixed NAV structure, prove they have the cash on reserve to protect the buck, or both.

Fidelity counters by pointing out that the asset class is doing all right now and that no Lehman-style disaster is likely.

The real issue here is that MMFs came to prominence because of their unique structure, which allowed them to substitute for cash in retail and institutional portfolios alike.

Move to a floating NAV, and the accounting headaches and fiduciary issues multiply. Is a floating-NAV money market fund really just another short-term fixed-income vehicle? Should it be allocated as fixed income?

And with sponsors already suffering more or less silently after years of waiving fees in order to keep shareholders whole in the face of near-zero gross yields, asking them to tie up real cash for the "privilege" of supporting these vehicles seems pointless.

Maybe the SEC is trying to kill this asset class. If so, that's a different story.

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